As the last of 19 cannons sounded in Tiananmen Square, Prime Minister
Julia Gillard
and her Chinese counterpart
Li Keqiang
began chatting. It was just small talk as they passed the marching band and walked into Beijing’s Great Hall of the People, but it was a breakthrough all the same.

No interpreters were required and for a moment the formality of the occasion was broken. Such moments have been rare for foreign leaders in China in the last decade. The language barrier and the in-built stiffness of most senior Chinese officials has usually prevented any rapport being established.

But Li, who was installed as Premier in March, is vastly different from those who have gone before him. Not only does he speak fluent English – he translated The Due Process of Law while at university – but he has also adopted a more relaxed leadership style.

The 57-year-old and his President
Xi Jinping
have dropped the dour expressions and decided its ok to show warmth in public. This is a great thing for Australia.

Li’s ability to speak English and willingness to engage on a personal level should allow Australian leaders to build a relationship with China’s number two.

“He’s an outgoing person to talk with," Gillard said after her meeting on Tuesday evening. “He’s quick to smile and share a joke."

And while Gillard is unlikely to be around for the next leaders meeting, Li will certainly be there. He is scheduled to be China’s Premier until March 2023 and so he will be personally responsible for the relationship with Australia over that entire time. The signing of a “strategic partnership" between the two countries on Tuesday ensures the participation of Li.

It locks in an annual leaders meeting between the Australian Prime Minister and Chinese Premier, along with meetings for the Foreign Minister, Trade Minister and Treasurer with those in similar positions in the Chinese system. But Li is the key man in this deal.

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As Premier he has overall responsibility for the Chinese economy and will be the key architect of any major reforms over the next decade. That means Australia has a direct line into China’s key economic official, who is also the second-ranked member of the Politburo Standing Committee, the country’s top decision-making body.

The challenge will be to use this access to finally complete a free trade deal and tackle tough issues like the ­jailing of Australians in China over commercial disputes.

Li’s personal story should help in the forging of relationships at the highest level. The Premier is not part of China’s “red aristocracy" or the so-called princeling class, which had access to the best schools, universities and government jobs. The princelings are quite literally aristocrats and have as much right to inherit power from their parents, as their European equivalents have to a title. President Xi is from this system – his father was one of eight “immortal" generals who fought alongside
Mao Zedong
. But Li rose through the Youth League system, where brains and ambition make up for the lack of family pedigree in the closest thing China has to a meritocracy.

As a 21-year-old Li completed one of the world’s toughest exams and won a place at Peking University in the class of 1977, the year it re-opened after the madness of Mao’s Cultural Revolution. During his time at China’s top university, Li gained a law degree and economics doctorate, making him the most highly educated person to ever sit on the Standing Committee.

But Li’s easy smile and bookish nature should not be mistaken for weakness or a desire to move China closer to the West. In fact the opposite appears true.

The Chinese are playing a big strategic game and Australia has found itself right in the middle. The state-run Global Times newspaper, which often airs China’s more hawkish foreign policy views, showed how some factions in Beijing view the strategic partnership.

In an editorial on Wednesday the newspaper said the deal made it possible for China to draw Australia away from Japan and the United States. “It is possible to prevent Australia from ­siding with the US and Japan, and make it one of the most China-friendly ­countries in the Western world," the newspaper said. “There is no single country in East Asia which is willing to sacrifice economic ties with China over geopolitical frictions."

This is a clear reference to the ­tensions over disputed islands in the East China Sea, which has pushed China/Japan relations to their lowest level in decades. And while the tensions have eased somewhat in recent weeks the US has come out strongly and said it would leap to the defence of Japan in any military conflict.

While that appears unlikely in the short term, the Chinese are making it clear at some point Australia may need to choose between its allies and economic lifeline. According to the Global Times China has already won this argument. “Given Beijing’s strong economic leverage, few countries would choose to adopt a determined anti-China stance," it said. “Those involved in frictions with China would rather behave in a cautious and restrained way. This is already a strategic victory for Beijing."

The job of Australian leaders and diplomats over coming years is to avoid ever having to make such a crude choice between China and the US. This will require delicate diplomacy, but there’s no doubt China feels it took a few points away from the US this week. It did this partly by allowing Gillard to leave China feeling she had achieved two big outcomes. Not only did the Chinese agree to the final details of the strategic partnership in just a month so Gillard could announce it in China, but they also gave Australia direct trading rights with the yuan.

Both were good stories for Gillard and may even give her a boost at home. In agreeing to both deals the Chinese gave up nothing and are now playing a long game to draw Australia closer.